Nowadays, China faces a lot of social problems that have affect on China’s economy. One
of the social problems is ageing population, an extremely low birth rate, further increasing
the proportion of the senior population, caused by China’s three-decade one-child policy.
From 2001-2010, China’s population budged up at just 0.57% annually, only about half the
level of the previous decade, and only 20% of the level in 1970, when one child policy put
to use. By 2010, nearly 14% of Chinese citizens were over 60, and nearly 10% were over
65 or around 1.35 billion citizens are retirement. China is already an ageing society. There
are many impacts of ageing population on China’s economy.
First of all, ageing population affects economic performance, and it does not tend to be
beneficial for China’s international competitiveness. It leads to a decline in the percentage
of the productive labor force, which in turn raises the average wage level, making China
less competitive in labor-intensive industries. Because of a considerable decline in the
supply of young labor, China encounter a shortage of worker. In the past, China was rely
on almost unlimited low-cost labor in achieving economic growth. Nevertheless, if China
would move from a huge supply of low cost workers to a labor shortage economy, it could
quickly lose its competitive edge. China will not stand in good stead to adjust low-cost
labor intensive industrial structure and move to other resource intensive industry.
Secondly, the Chinese private savings, the most important source of capital for investment,
will decline as a share of GDP over the coming decades. Currently, China has many more
